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Ahngram Corp. has 1,000 defective units of a product that cost $3.30 per unit in direct costs and $6.80 per unit in indirect cost when

Ahngram Corp. has 1,000 defective units of a product that cost $3.30 per unit in direct costs and $6.80 per unit in indirect cost when produced last year. The units can be sold as scrap for $4.30 per unit or reworked at an additional cost of $2.80 and sold at full price of $12.90. The incremental net income (loss) from the choice of reworking the units would be:

Multiple Choice

  • $2,800.

  • $4,300.

  • $10,100.

  • ($2,800).

  • $0.

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